Retirement-day payout calculator
What will I actually receive on the day I retire, and how much of it is taxed?
₹0 of it taxable · ₹0 of tax · ₹93.85 L after tax
| Receipt | Amount | Tax-free | Taxable | Tax |
|---|---|---|---|---|
Gratuity Within the ₹20 lakh limit | ₹13,84,615 | ₹13,84,615 | ₹0 | ₹0 |
Leave encashment None entered | ₹0 | ₹0 | ₹0 | ₹0 |
EPF settlement Tax-free after 5 years of service | ₹80,00,000 | ₹80,00,000 | ₹0 | ₹0 |
NPS lump sum (0%) None entered | ₹0 | ₹0 | ₹0 | ₹0 |
How this is calculated
Rules checked against their sources on 29 September 2026. Tax year FY2026-27.
The largest cheque of your life
On the day a salaried Indian retires, four things arrive at once: gratuity from the employer, the encashment of unused leave, the settlement of the EPF account, and, for NPS subscribers, the lump-sum share of the corpus. Together they are usually the biggest sum the person has ever held, and two smaller streams start alongside: the EPS pension and, if an annuity is bought, its monthly payout.
What is taxed, and what is not
Gratuity is exempt up to ₹20 lakh for private employees and fully for government; the excess is salary.
Leave encashment is exempt up to ₹25 lakh for private employees and fully for government; most employers cap encashment at 300 days.
EPF is entirely tax-free after five years of continuous service, including the interest.
NPS is tax-free on 60% of the corpus. You may now take up to 80% as a lump sum, but the 20% above the exemption is taxed as income in the year of exit; the remaining 20% or more must buy an annuity, whose income is taxed every year.
The calculator shows each line's exempt and taxable parts and the tax at your slab, so you can see that a single year with ₹30 lakh of taxable receipts is taxed differently from the same money spread over two.
The two pensions, and their weakness
The EPS pension is small, ₹7,000 to ₹12,500 a month for a full career at the wage ceiling, and fixed for life. An NPS annuity pays about 6% to 7% of the purchase price a year, also fixed unless you buy an increasing option at a lower starting rate. Both lose half their purchasing power in about thirteen years at 5.5% inflation. They are a floor, not a plan.
What to do with the stack
The usual mistakes are parking the whole sum in deposits (safe, but the income shrinks every year in real terms) or handing it to a relative's business. The better sequence is: an emergency reserve, clearing any loan, a ladder of safe income for the first years (SCSS, POMIS, bonds), and the rest invested for the years beyond ten. The income-ladder and SWP calculators on this site take it from here.
How this fits a retirement plan
A plan places every one of these receipts on its date, taxes the taxable parts in that year, pools the cash into the withdrawal buckets and treats the pensions as guaranteed income that fades. The projection on this site does exactly that.
Questions people ask
- How is leave encashment calculated?
- Employers pay basic and DA divided by 30, times the days encashed, usually capped at 300 days of earned leave. It is exempt up to ₹25 lakh for non-government employees (since 2023) and fully for government. Encashment during service is fully taxable.
- Is the EPF settlement really tax-free?
- Yes, after five years of continuous service, counting transferred accounts. Interest credited after you stop contributing is taxable, and interest on your own contributions above ₹2.5 lakh a year was taxable when earned. Withdrawal within five years is taxed, with TDS above ₹50,000.
- Should I take 60% or 80% of NPS as a lump sum?
- Sixty percent is the tax-free limit. Taking 80% puts the extra 20% in your income for the year, often at 30%. Unless you need the cash, a 60% lump sum and a 40% annuity, or deferring the exit to spread it, usually costs less tax.
- Can I reduce the tax in the retirement year?
- Partly. Section 89 relief applies to gratuity and leave encashment relating to earlier years; the NPS exit can be deferred to 75 and taken in instalments; and timing a March retirement puts the receipts in a year with only a few months of salary.
- When does the EPS pension start?
- At 58, whether or not you retire then; early pension from 50 at a 4% reduction a year. It needs ten years of service and is computed on the last 60 months' pensionable salary capped at the wage ceiling (₹25,000 from 17 September 2026).
Want the whole picture?
A free Eazyretire plan puts this number next to your income, savings and spending and tells you whether your money lasts to the age you plan for, and what to change if it will not.